Summary of Temporary Differences of Deferred Tax Assets and Liabilities

Temporary differences that give rise to significant deferred tax assets and liabilities as of September 30 are presented in the following table.


(In millions)	2022			2021
Deferred tax assets
Foreign net operating loss carryforwards (a)	$	23		$	30
Employee benefit obligations		18			30
Environmental, self-insurance and litigation reserves (net of receivables)		116			99
State net operating loss carryforwards (net of unrecognized tax benefits) (b)		19			32
Compensation accruals		29			24
Credit carryforwards (net of unrecognized tax benefits) (c)		20			19
Other items		21			11
Other lease liability		17			20
Valuation allowances (d)		(56	)		(74	)
Total deferred tax assets		207			191
Deferred tax liabilities
Goodwill and other intangibles (e)		169			201
Property, plant and equipment		175			179
Right of use assets		16			18
Other		3			—
Total deferred tax liabilities		363			398
Net deferred tax liability	$	(156	)	$	(207	)

(a) Gross net operating loss carryforwards of $93 million will expire in future years beyond 2023 or have no expiration.

(b) Apportioned net operating loss carryforwards generated of $585 million will expire in future years as follows: $106 million in 2023, $83 million in 2024 and the remaining balance in other future years.

(c) Credit carryforwards consist primarily of foreign tax credits of $17 million expiring in future years, and state tax credits of $3 million that will expire in 2026 and other future years.

(d) Valuation allowances primarily relate to certain state and foreign net operating loss carryforwards and certain federal credit carryforwards.

(e) The total gross amount of goodwill as of September 30, 2022 expected to be deductible for tax purposes is $44 million.

Summary of Changes in Unrecognized Tax Benefits

Changes in unrecognized tax benefits were as follows:


(In millions)
Balance at September 30, 2020 (a)	$	171
Increases related to positions taken on items from prior years		8
Decreases related to positions taken on items from prior years		(70	)
Increases related to positions taken in the current year		11
Lapse of statute of limitations		(20	)
Settlements		(18	)
Balance at September 30, 2021	$	82
Decreases related to positions taken on items from prior years		(5	)
Increases related to positions taken in the current year		19
Lapse of statute of limitations		(12	)
Balance at September 30, 2022	$	84

(a) Ashland has indemnity receivables from Valvoline and Pharmachem for zero and $1 million of the gross unrecognized tax benefits at September 30, 2022 and 2021, respectively, recorded within other noncurrent assets.